Southern Maryland Best Buys

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The Risks of Overpricing -

The risks of overpricing in a nutshell....

Pricing a home more than 3% over the market value could result in the following:

 Buyers may choose not to view the home at all because they perceive there are better values in other lower priced "comparable" properties.

 By pricing in a higher price range you eliminate potential buyers that otherwise might be able to afford the home if it were priced closer to the market value.

 If a buyer is willing to pay more than market value (and this is not the norm) they may not be able to get financing because the property may not appraise.

 While all of this is going on the home is "not on the market" and you loose valuable time.  A home that stays on the market too long because it is priced too high gets stigmatized.  This is why it's critical to price it right from the beginning and set the correct expectations of the seller.

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Comment balloon 2 commentsCheryl Ritchie • December 28 2009 07:03AM

Comments

Succinct information.  Great post!

Kathy

Posted by Kathy Brown (Keller Williams) almost 9 years ago

Wow, your market must all be homogenous. In ours, with multiple ages, neighborhoods, etc, even the appraisers would most likely be farther apart in value than 3% if they all appraised the same house. So not to leave money on the table for my seller, I usually add say, 5%, but in a hot market maybe 10%. Also, every sale in the MLS does not mean it sold for market value. I see some agents add a lot more than that, then it sells for way less. Brokers lead the market (up or down), appraisers follow it!

Posted by David Jirasek, ALC, CCIM (Jirasek Realty) almost 9 years ago

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